If ever there was a display of the ugly realities of politics today, it was at Senator John Carona’s Transportation Committee hearing on his “local option” menu of new taxes. Virtually EVERY county judge, mayor, and local transportation official traveled to Austin to lobby for more of YOUR money on the taxpayer’s dime! The stack of witness cards was 3 inches thick, and not from ordinary citizens wishing to testify AGAINST this litany of taxes (we were too busy working to pay the government), but from our own government working full-time to get access to what’s left of our money.Add to that, the parade of Chamber of Commerce types and taxpayer-funded “Mobility Coalitions” along with “ousted” former House Transportation Committee Chair Mike Krusee slithering about, it was a taxation free-for-all with everyone but the taxpayers themselves as invited guests to the aristocracy’s ball.
It’s such fun for them to spend other people’s money, but at the end of the day, there’s only so much of OUR money to go around and it’s plum run out! Rather than heed the warning signs of the collapse of the credit market, the implosion of toll roads, these public-private toll roads in particular, they bury their heads in the sand and proceed unabated headlong into MASSIVE leveraged debt that will put us, our children, and great grandchildren in a deep hole for generations.
This latest feeding frenzy will only come back to haunt us, but it never seems to haunt them since they will have already moved on to higher office by the time it all hits the fan! We’ll be the ones left holdiing the bag. Knowing their policies are TOTALLY unsustainable, we’re witnessing a wreckless neglect of their fiduciary duty to build and maintain a STATE highway system and to be guardian’s of the public interest.
SB 855 & SB 882
Senator John Carona’s menu of tax hikes
His bill could increase your gas tax every year, charge new residents an impact fee but not developers, a vehicle registration tax hike, driver’s license tax, an emissions tax, and even a tax on a parking space. Then, Carona tried to sneak in an increase in payments to LOSING BIDDERS on road projects into a bill on toll collection in SB 882! He raises the current cap of $250,000 to a payment solely at the discretion of the tolling authority. They say there’s no money for roads, and yet they’ve got money to pay road contractors even when they DON’T build the road! Only in transportation does it pay to be a “loser.”
Private toll road nightmare!
Senator Robert Nichols claims this bill protects the public from privatized toll roads (called CDAs, pure profit centers), when TxDOT has the option to waive the restrictions! It also allows non-compete agreements (which guarantees congestion on the free roads), payments for “future” loss of toll revenues to the private toll operator if the state buys back the road, removes the State Auditor’s review of these contracts, and the private operator would be paid “fair market value” if the state buys back the road (without stating how that value is calculated or who decides the final pricetag).
It’s supposed to “protect” the taxpayers from private roads and keep them in public hands, but if the local toll entity doesn’t have the bonding capacity to make it work and declines the project, TxDOT can then also “decline” the project giving it to the private operators by default (which we can rest assured, they’ll do). CDAs cost at least 50% more and they charge extremely high tolls (like the deal Cintra just got on 820 in Tarrant County; commuters will pay 75 cents a MILE to get to work). It’s unsustainable!
Even after hearing an example of how the State Auditor caught the Alamo RMA not properly factoring in gas prices in their projections for toll traffic on 281, Nichols actually insulted the intelligence of our State Auditor by saying they “didn’t understand” toll viability studies so he arbitrarily removed the Auditor from oversight on these deals, stripping the process of a needed layer of accountability, and transparency. Don’t we owe it to the taxpayers to subject these deals to every level of scrutiny possible before handing our highway system over to foreign companies for a half century?
It was only two years ago when Nichols championed this very clarion call. Where has that taxpayer warrior gone?
Then, the grandaddies of them all…
Carona’s bill to extend PPPs rather than let them die their rightful death this fall
These Public-Private Partnership Toll contracts called PPPs or CDAs in Texas, are scheduled to sunset in September. They’re rife with problems, trample on the public interest, amount to government-sanctioned monopolies, and utilize massive risky leveraged debt that threatens the very solvency of this country. Please read our CDA Fact Sheet for the details here.
Bill to charge a congestion tax, commuter tax, tax on every mile you drive!
Senator Jeff Wentworth’s, SB 942, would allow a county to impose any or all of these taxes WITHOUT A VOTE. The vote is optional. Taxes could also be hiked for “services” (not just transportation projects) without naming the services they can tax.
The bill calls for a menu of tax increases like:
– an impact fee for new residents BUT NOT an impact fee on developers
– a gas tax
– a tax on passenger vehicles but NOT commercial vehicles
– a commuter tax on those commuting into a county (with no limit whatsoever)
– a real estate transaction tax
– a vehicle registration tax
– a vehicle sales tax
– a sales tax
– a tax on every mile driven (with no limit)
– a congestion tax for “high congestion areas during peak hours” (in addition to their plan to toll those areas!)
The county could impose one or ALL of these all at once without a vote! Glaring problem number 1,561 is the “optional” vote is only on the table if the citizens gather signatures (with a very high bar to meet, 10% of the last gubernatorial general election!). All this while Wentworth is also advancing his bill, SB 690, to increase the number of signatures needed for local referendums!
None of these taxes should EVER be imposed without an automatic public vote, period. Lastly, the bill doesn’t mandate the tax be tied to a specific project or that it sunsets when the projects are paid for (this, too, is optional), and the county can increase the tax rate without a vote. It’s a taxation free-for-all!
Your emails and phone calls did help because he offered an amended version of the bill that would at least REQUIRE a public vote. Gee, thanks. Now we can look forward to them choosing the most ackward day on the calendar to call for an election, hold every road project hostage until we agree to the new taxes, and hold our breath that more of us turnout than all the road contractors and their employees.
Apparently us working stiffs and mere taxpayers don’t have the clout the real estate lobby does, because he stripped out their real estate transaction tax in the new version.
Needless to say, we oppose this bill outright. We think, after ending the diversions to the gas tax (and curbing tolling), that a fixed increase in the gas tax is a far better, more accountable, and transparent long-term solution.
TURF testified against these bills. Here are some of the formal comments…
TURF’s Testimony on SB 17
We commend Senator Nichols’ efforts for working on this evaluation process that has been in the works for nearly a year. Protecting the public interest is PARAMOUNT! How we do that is the open question here today.
Here are some of our concerns with SB 17 as drafted. We overall support the idea of CDAs being the last resort (we’d prefer they go away completely). But knowing how TxDOT operates and how it has become an extension of private industry instead of the guardian of the public interest, we think there are some gaping holes through which TxDOT will gladly leap through using the language of this bill.
Concerns with SB 17:
– Allows compensation to the private developer for the future loss of toll revenue (Sec. 301.103) in the form of a non-compete agreement for up to 30 years. Though you could argue the Dept. can still build anything in an MPO plan and for safety and maintenance, we’ve seen TxDOT strip out projects from the MPO plans in anticipation of selling bonds where the bond investor required a non-compete. So this will be manipulated in favor of the private investors placing the public interest at risk (by guaranteeing congestion on surrounding free roads for 30 years).
– We feel strongly that the State Auditor should still review these contracts. Even on a public toll project, US 281 in San Antonio, the Auditor reviewed the terms of the CDA and found the RMA had not properly factored the price of gas into their toll viability studies and recommended they re-do the study. The public deserves this extra protection.
– Allows the private developer to receive “fair market value” for a PUBLIC road without saying how this is to be calculated. It’s likely the private operator who will ultimately determine the price, so we’d like to see the bill require transparency on the debt owed (to avoid a self-reported figure) and have the calculation of “fair market value” scrutinized for soundness by the State Auditor or the public will, once again, be left holding the bag.
– TxDOT will naturally decline the project as a public project in favor of a private concession as they’ve already demonstrated when asking Harris County to sell their toll system to a private entity. The way this is structured, if the public toll entity like an NTTA cannot get the financing together (or the bonding capacity), they’d have to pass this to TxDOT and then TxDOT could hand it to the private developer, especially to use private funds to subsidize a toll project that can’t stand on its own feet (that isn’t 100% toll viable) (Sec 373.054). So this section ultimately doesn’t give the public protection, but shows TxDOT they can just wait it out, not provide any public subsidies (like TMF funds, other discretionary funds, etc) until they get possession of the project and then they can hand it to the private companies.
– Allows TxDOT & toll entity to waive these steps, which defeats the purpose of the bill (Sec 373.057) and allows them to jump precipitously into a CDA.
Ultimately, we’d like to see an honest, legitimate process to evaluate ALL road projects with a process that helps us determine FIRST between tolled and non-tolled, then go to a public or private toll road evaluation scenario. This assumes most projects will tolled. All these pots of public money being used to subsidize toll projects that can’t stand on their own two feet simply should NOT be built as toll projects if they’re not 100% toll sustainable. To do less is a DOUBLE and TRIPLE tax scenario unduly burdening our citizens for generations to come.
What it comes down to is, the citizens do not trust any process where the status quo Transportation Commission is still in place. As we described, TxDOT can quite easily hand over a massive portion of our highway system to private operators through CDAs (even using this process) that would cost 40% more than publicly owned projects and are faltering or failing all over the country. Not one PPP could even be held up as a model during the CDA Study Committee hearings, not even by the FHWA Administration who has been pushing this stuff.
We need fundamental, sweeping change by abolishing the Commission and replacing it with ELECTED leadership, whether it’s a single elected, or regionally elected commissioners, status quo is not an option for trust to be restored and to halt the legal and political wrangling that’s been keeping many projects from moving forward.
Instead of investing so much time and effort on how to cage the beast of CDAs unleashed by HB 3588 in the Williamson era, allow them to ride off into the sunset as scheduled and chart a new course. Modestly raise the statewide gas tax and get back to the business of building and maintaining a STATE highway system, instead of a slice and dice, hodge-podge separating rich from poor, urban and rural, and the city-state system you’re creating versus ONE unified and uniform system we can all easily access and be proud of again.